Research On The Impact Of Shanghai Construction Engineering's Private Placement On Corporate Performance

As a new way of equity refinancing,private placement first emerged in the United States in the 1930s and became the main way of equity refinancing in the 1990s.With the development of China’s capital market,private placement was introduced in listed companies in the late 1990s.However,before the non-tradable shares reform,there were few cases of private placement.Private placement was favored by listed companies.Until 2006,the China Securities Regulatory Commission promulgated the"Administrative Measures for the Issuance of Securities by Listed Companies" and private placement was first incorporated into the legal level.Private placement quickly became the most important way of equity refinancing for the listed companies.The related research of private placement has also been paid attention to by the academia and is constantly expanding.At present,the studies are mainly from the effect of private placement announcement,discount rate,tunneling,earning management,and other relevant studies on this topic.Some scholars have studied the influence of private placement on enterprise performance,but most of the focus is on empirical research on a single market response or long-term financial performance,with few case studies.When making the case studies of private placement,researchers only discuss the results of impact on enterprise performance and seldom analyze the cause.This paper select Shanghai Construction Group Co.,Ltd.as the case sample,with two private placements completed in 2010 and 2014 as entry point to compare and analyze the enterprise performance from the perspective of market reaction and financial performance,to analyze the causes to affect performance.This paper firstly combs relevant literatures to summarize relevant theoretical research results in the field of private placement at home and abroad,and then defines the concepts of private placement and enterprise performance,and sorts out the theoretical basis of this paper.Secondly,by combining the case with theory,this paper compares enterprise performance before and after private placement of Shanghai Construction Group Co.,Ltd,including market reaction and financial performance.According to the research,the enterprise performance after the asset-injection type of private placement in 2010 is significantly better than the type of project financing private in 2014.The difference in enterprise performance between the two private placements is not only related to the operation of the underlying assets or projects,but also closely related to the event itself.Based on the Asymmetric Information Theory,Supervision Theory,Optimal Capital Structure Theory,this paper analyzes the cause of influence of private placement on enterprise performance.According to the analysis,this paper finds that the conformity with goals of injected assets and funds,the subscription of major shareholder,the supervision role of the issuing object and the optimization of capital structure will play a role in enhancing the enterprise performance in the process of private placement.Finally,on the problems from the two private placements,this paper put forward relevant recommendations further.This study is not only helpful for listed companies to make the most favorable private placement decision plan according to their own actual situation,but also helpful for investors to make wise investment decisions to achieve long-term benefit.At the same time,it provides suggestions for regulatory authorities to strengthen the control of private placement.